Ok,
The company is quite interesting. From my understanding it has a patented electric-motor-enhancing technology that can be integrated with a wide variety of applications. In the last quarter it entered into several key partnerships including Clean Sead, Zero, and Australia's SEA Electric - all green companies looking to make EVs. In essence their tech "expands the capabilities of electric motors and powertrains".
Recently, the company offered a unit offering at $0.70 per unit which includes 1 share + 0.5 warrant which grants the holder the option to exercise the warrant at a price of $0.90 per share for 2 years. These types of bought deal offerings aren't the greatest. Having a ton of warrants out there, is further dillutive to existing shareholders. However, given it is a relatively unknown company, they tend to have to make these type of deals to attract investors. Once they are established, you would see offerings without warrants or options. To me, this is a sign that the company still has a hard time raising capital.
It also seems like the company is in the very early stages of its lifecylce. It generates no revenue and considerable cash burn. As a micro cap, they don't have ready access to debt markets so typically they are required to issue shares to keep the operations going. The latest offering is expected to raise proceeds of $8 M which should keep them going for the next few quarters. Between 2019 and thus far in 2020, the number of shares outstanding has increased by ~32% (not including the most recent offering). So there is significant dilution taking place.
The company certainly looks interesting and i really like the products, but it is very difficult to value a company that has yet to generate a dime of revenue. The company expects to close on eight commercial partnerships and is close to delivering the first proof of concept of its 100V Coil Driver in Q4.
Overall, this is a highly speculative company which is only for the aggressive investor. I am curious however, how you came to your $8 price target when there is no revenue model (let alone profit or cash flow model) to come up with said valuation.
Thanks,
Mat